Equity Bank posts Sh4.2bn net profit in Q1

Equity’s interest expenses grew 31.9 per cent to Sh1.8 billion as customer deposits expanded by Sh71.1 billion to Sh276.7 billion. PHOTO | FILE 

By BD REPORTER

In Summary

• Equity Bank's net profit in the period stood at Sh4.2 billion compared to Sh3.8 billion a year earlier.
• This came as total interest income rose 12.5 per cent to Sh9.4 billion, largely driven by a 25.3 per cent jump in the loan book to Sh224.7 billion.

Equity Group posted a 10.7 per cent net profit growth in the first quarter, helped by increased lending and higher income from transactions.

The bank’s net profit in the period stood at Sh4.2 billion compared to Sh3.8 billion a year earlier. This came as total interest income rose 12.5 per cent to Sh9.4 billion, largely driven by a 25.3 per cent jump in the loan book to Sh224.7 billion.

Non-interest income, including commissions and forex trading, increased 40 per cent to Sh5.6 billion.

Equity’s interest expenses grew 31.9 per cent to Sh1.8 billion as customer deposits expanded by Sh71.1 billion to Sh276.7 billion. The lender’s operating expenses, including staff costs, rose 24.1 per cent to Sh7.1 billion.

The performance came as private equity firm Helios announced it has completed the sale of a 12.2 per cent interest in the bank to a consortium led by sovereign wealth fund Norfund. The transaction has halved Helios’ interest in Equity to 12.2 per cent.

“Equity is delighted to welcome Norfund and Norfinance into the anchor shareholding of the group,” the bank’s CEO James Mwangi said in a statement.

Norfund’a managing director Kjell Roland said the investment is in line with the institution’s strategy to support banks targeting entry level and mass-market retail banking, and SMEs in Africa.

Helios’ managing partner Babatunde Soyoye said the firm will continue as a partner in the bank, having played a major role in its success including the injection of Sh11 billion in 2007 that earned it a 24.4 per cent stake.